ADVERTISEMENTREMOVE AD

QBiz: RBI Policy Rates Remain Same; Mistry-Tata Fight Continues

Catch the latest business news from across the country on QBiz. 

Published
Business
5 min read
story-hero-img
i
Aa
Aa
Small
Aa
Medium
Aa
Large
Hindi Female

1. RBI Surprises, Keeps Policy Rate Unchanged

The monetary policy committee of the Reserve Bank of India (RBI) chose to overlook, for the time being, the effects of demonetisation as it voted unanimously – and unexpectedly – to leave the key policy rate unchanged.

The six-member panel said it needed more data to evaluate the long-term impact of currency replacement and also cited inflation risks. It also cut its gross value added (GVA) growth estimate for the current fiscal year by 50 basis points (bps) to 7.1%. A basis point is one-hundredth of a percentage point.

The panel headed by Governor Urjit Patel chose to err on the side of caution in the belief that monetary policy should not react to short-term developments that influence the outlook disproportionately.

It did, however, say that the demonetisation of high-value banknotes will shave 10-15bps off the inflation rate in the third quarter of the current fiscal. The policy stance remains accommodative, meaning that there might be a rate cut in the February meeting.

That said, the central bank pointed out that upside risks to inflation still remain, albeit lower than projected in the October policy review.

(Source: Livemint)

ADVERTISEMENTREMOVE AD

2. RBI’s Surprise Policy Decision Makes Sensex Fall

The benchmark Sensex reversed its two-day rally as it fell 156 points on Wednesday to end at 26,237 as RBI left interest rate unchanged at 6.25%, contrary to market expectations, in its first policy review since the currency switch.

Reserve Bank Governor Urjit Patel on Wednesday left the repo rate intact in his second monetary policy even as the central bank lowered GDP growth forecast to 7.1% from 7.6% for the current fiscal, saying short-term disruption in economic activity and demand compression arising out of demonetisation has led to downside risks to growth.

The 30-share index declined by 155.89 points, or 0.59 %, to 26,236.87 after shuttling between 26,540.83 and 26,164.82. The gauge had gained over 162.10 points in the previous two sessions. The wider Nifty hit a low of 8,077.50 before recovering partially to settle at 8,102.05, down 41.10 points or 0.50%. It had touched a high of 8,190.45 in early trade.

Interest-linked banking stocks such as SBI, HDFC Bank, ICICI Bank and Axis Bank fell by up to 2% in reaction to the RBI decision.

(Source: PTI)

0

3. Cyrus Mistry's Presence in Tata Group Boards Disruptive: Ratan Tata

Ratan Tata appealed to his shareholders to remove his predecessor Cyrus Mistry from the boards of Tata Group companies as his continuation would be a “serious disruptive influence” and will make the companies dysfunctional.

The statement, the first from the conglomerate’s interim chairman who made a comeback on 24 October after the removal of Mistry, also explained the sacking. He said the Tata Sons board has taken that decision after the relationship with Mistry steadily deteriorated and several attempts to remedy the situation went unheeded. ‘’The board of Tata Sons lost confidence in him and his ability to lead the group in future,” Tata said.

‘’As a final step, Mistry was offered an opportunity to step down voluntarily from the chairman position, which he rejected, and said it should be taken up at the board, where he was eventually replaced,’’ said Tata , who helmed the group between 1991 and 2012.

ADVERTISEMENTREMOVE AD

4. Niti Aayog Said to Recommend Tax Breaks For Digital Payments

India should consider offering tax incentives to citizens making purchases through digital modes of payment and penalise cash transactions, according to recommendations of the government’s top policy think tank, people with the knowledge of the matter said.

The Niti Aayog has suggested an additional charge to be levied on cash transactions so that more individuals opt for electronic payments, two government officials said asking not to be identified citing rules. It has also recommended the government scrap rules that restrict online sale of certain types of medicines.

The recommendations are an effort to tide over the shortage of banknotes by forcing cash dependent Indians to turn to online payments.

(Source: Livemint)

ADVERTISEMENTREMOVE AD

5. Ola, Flipkart Founders Seek Market Protection

The founders of India's top two consumer Internet companies Sachin Bansal and Bhavish Aggarwal have called for enforcing protectionist measures against their global rivals Amazon and Uber, accusing these firms of dumping capital to buy customers to become monopolies in the country.

India is the world's last large open market where Amazon and Uber are pitted against local rivals Flipkart and Ola respectively. Both firms have committed billions of dollars to capture India, giving tough competition to the local leaders, who have mirrored the business models of these two US internet companies.

ADVERTISEMENTREMOVE AD

6. Jan Dhan Deposits Slowed After Govt Apprised Against Misuse of Account: CBDT

The Jan Dhan deposits have slowed down after the Centre warned against misusing such accounts for converting black money into white. The NDA Government had also said that average deposit per Jan Dhan account at Rs 13,113 during November 8-2 December is not alarming. Meanwhile, the Income tax department has come across several inconsistencies in cash deposits in Jan Dhan accounts and found that around Rs 1.64 crore deposited by those people who have never filed returns as their income shown is below the taxable limit.

The Central Board of Direct Taxes (CBDT) today once again said that its warning to people against permitting misuse of their accounts by unscrupulous elements. On Sunday, Ministry of Finance had said that the Investigation being conducted by the income tax department across the country into the sudden increase in cash deposits in Jan Dhan accounts have revealed several inconsistencies.

ADVERTISEMENTREMOVE AD

7. Rs 1.54 Lakh Cr Worth Bad Loans Written Off By Public Sector Banks Between 2013-2016

Public sector banks (PSBs) have written off Rs 1.54 lakh crore of bad loans between April 2013 and June 2016, Parliament was informed on Wednesday. During 2013-14, all PSBs written off Rs 34,409 crore non-performing assets (NPAs). The amount increased further to Rs 49,018 crore in the following year. Banks wrote off NPAs of Rs 56,012 crore during 2015-16, Minister of State for Finance Santosh Kumar Gangwar said in a written reply to the Rajya Sabha.

He further said that Rs 15,163 crore write-off of NPA has taken place during the first quarter of the current fiscal.

(Source: PTI)

ADVERTISEMENTREMOVE AD

8. Micromax Customers Quite Cashless; Sales Down 30%

Consumer sales of domestic mobile handset vendor Micromax have fallen by up to 30% in the past 3-4 weeks due to demonetisation sucking up cash from the system coupled with seasonal slowdown after Diwali, a top official has said.

Shubhajit Sen, chief marketing officer at Micromax, on Wednesday also claimed that the impact on the company was lower than that on the overall industry.

Speaking at the sidelines of the launch of Micromax’s latest 4G smartphones launch, Sen said industry-wide sales through e-commerce channels have been hit the most because the hard cash liquidity crunch has impacted the ‘cash on delivery’ mode, which most Indian online shoppers preferred.

ADVERTISEMENTREMOVE AD

9. Jet Airways Said to Seek $300 Million Funding For Expansion

Jet Airways India Ltd., the carrier part-owned by Etihad Airways PJSC, is seeking to raise about $300 million to fund expansion on international routes, people with knowledge of the matter said.

Jet Airways, India’s second-largest airline by passengers, has started talks on a potential equity fundraising from investors other than Etihad, the people said, asking not to be identified because the information is private. The company, which has a market value of 41.9 billion rupees ($619 million), aims to sell stock at a premium to its current share price, according to one of the people.

Years of losses and a high debt load are severely restricting Jet Airways’s ability to expand its fleet aggressively, Mumbai-based brokerage IIFL Holdings Ltd. wrote in a Sept. 26 research report. The market share of Jet Airways has fallen in the past four years as the number of local carriers almost doubled to 11, according to data from the aviation regulator.

(Source: BloombergQuint)

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

Read Latest News and Breaking News at The Quint, browse for more from news and business

Topics:  Business   Flipkart   Ratan Tata 

Speaking truth to power requires allies like you.
Become a Member
3 months
12 months
12 months
Check Member Benefits
Read More
×
×